What Matters Most When Choosing an Employer of Record
It has never been easier to hire internationally. If you are looking for help to expand almost anywhere in the world, gone are the days when entity setup was required before onboarding a team member in another country. An Employer of Record (EOR) makes it fast and easy to hire in other countries.
That said, it is important to get it right, and not all EORs are the same. When you are choosing a global Employer of Record, you are outsourcing your company’s legal and HR infrastructure – it is critical to choose a company you can trust.
Table of Contents
What Does an Employer of Record Do?
An Employer of Record should provide the compliant global infrastructure so you can identify the candidate you wish to hire, issue them a local employment contract (complete with a competitive benefits package), and put your candidate on a locally compliant payroll – within hours if you use Globalization Partners. This lifts the burden of international legal, financial and HR matters off your shoulders, letting you focus on your business.
But in any new industry, whenever you are evaluating a partner, you may find many conflicting messages on all sides. What are the three factors you should consider when choosing an Employer of Record?
#1: What Happens After You’ve Signed the Contract?
You want to hire in other countries and using an Employer of Record is the fastest way to do it. But pay attention: “Anyone that is trying to understand where to go, if they are looking to get into new countries, must do their homework,” says Martha Angle, Vice President of Global Human Resources at OneStream Software. “Finding a provider that can speak at your level is one thing, and [finding one] that’s going to be able to follow through on what they promise you is another.”
During the evaluation process, vendors say they will give you the stars and the moon. But after the contract is signed, does your partner follow through on what they promised?
Be aware: helping you soft-land in a new territory is only the beginning. The real work comes afterwards when you or your professionals have questions. Will they be there to help you overcome hurdles and find accurate answers?
Some EORs rely on independent, in-country partners in every territory they serve, and this can often mean longer processes and inconsistent messaging to the professional. But Globalization Partners recognizes the importance of clear, accurate communication and makes it a top priority.
According to OneStream Software, “The person I see on my side that is the owner of the account, it’s also the same person that is turning around, talking to the employee. So the messaging is consistent, the turnaround time is consistent.” Globalization Partners has a centralized account management team as well as an HR professional on the ground in each country, working hand in hand with both you and the employee as an extension of your team.
“The person I see on my side that is the owner of the account, it’s also the same person that is turning around, talking to the employee. So the messaging is consistent, the turnaround time is consistent.”CLICK TO TWEET
Besides consistent messaging, OneStream Software also values the dedication of their team at Globalization Partners. “Anytime you work with any vendor, there’s an expectation on delivery and following through,” says Martha Angle. “It’s amazing to me how many people can’t do that. But with Globalization Partners, I’ve gotten that consistently”.
#2: Does Your Professional Receive an Exceptional Employee Experience?
As your international hiring partner, your EOR should be an extension of your team. They should have a seamless experience that gives them certainty about the next stage in their career. At Globalization Partners, customer’s employees are surveyed each month and never have reported less than 96 percent employee satisfaction with their onboarding experience.
“As the HR contact, it’s not just about what you guys do for me. It’s about what you guys do for employees and how you support them as well,” says Elizabeth Palmisano, Manager, Talent Acquisition and Human Resources at ClickDimensions.
First impressions matter. And you do not want your new employees complaining about an onboarding that did not make them feel welcome or part of your team.
“We had two new team members in Australia about two weeks ago. And they both said that everyone that they talked to was super helpful. From the moment they received their contracts all the way through their onboarding, there was always someone available to them in the region, which was important”.
Ms. Palmisano trusts Globalization Partners to support building a relationship with global employees. “And I know you can’t really put a price tag on your employee’s happiness. In these types of situations where you’re not right in front of them, and you don’t have that one-on-one rapport with them, having a company that’s able to create that rapport is crucial. And you guys do that”.
#3: Does Your Employer of Record Help You Be More Efficient and Effective?
A good EOR knows they aren’t just in the business of helping you hire internationally. They take legal responsibility for ensuring compliance with local law as well as best practices, because they understand that they are your outsourced legal, tax, and HR infrastructure.
Be aware of EOR providers that act as an umbrella company or a “middle-man” between you and a third-party provider in-country. It’s easy for this type of EOR, commonly called an aggregator, to offload responsibility onto those third parties.
Maybe the third parties the aggregator chooses to work with are well-intentioned, but are they built to meet the highest standard of legal and HR compliance? Are they really following GDPR best practices? Do they understand the importance of protecting your business’ best interests, including your intellectual property through watertight employment contracts?
Globalization Partners understands what is at stake, even while many aggregator competitors do not.
When Ms. Angle realized an employees’ bank information was requested via email by OneStream Software’s alternate EOR provider, a clear violation of normal data privacy and basic cybersecurity, she was instantly concerned. “It was what finally did us in. You just don’t do that.” What’s worse, their other EOR blamed their third-party provider for the misstep – completely denying responsibility for what should have been international business 101.
It was at this point that OneStream Software elected to transfer all personnel to Globalization Partners entities, ending their engagement with the alternate EOR provider. Ms. Angle continued, “We 100 percent have confidence in how [Globalization Partners] is transmitting information. Our employees are being sent a secure portal. That protection is critical to a company like ours.”
Trudy Schapansky, Global Human Resources Director at Centric Software, agrees on how important it is to have quick and efficient communication with your EOR. “Any HR department is very busy. If we send an email or make a call, we get an answer [from Globalization Partners] within the day. There’s no need ever to follow up. It just makes our job easier. We’re very grateful for the efficiency Globalization Partners has put in place”.
Conclusion: What to Look for
Evaluating the right EOR for your company is an important step in your international expansion execution.
Here’s what you should watch out for, according to business leaders who have already worked with an EOR:
- If a potential partner tries to sell you on the aggregator model’s benefits, they may not be built to adequately protect your business from a legal, HR, tax, finance, and IP perspective.
- If they can’t give you happy, satisfied customer references, watch out.
- If they don’t show a genuine interest in helping you impact your business, not just fulfill the bare minimum of their contract, they aren’t a true partner.
The right Employer of Record will genuinely help you remove the roadblocks you encounter when growing internationally. Many companies have found that trusted partner in Globalization Partners. It is easy to see why: we support 187 countries, help companies hire as quick as 12 hours, give 24/7/365 support, and report a 97 percent customer satisfaction.